The decision to register is up to the business. I would file a SAR, since they were operating in violation of the registration requirements at the time the transactions were made. When you do your follow-up in 90 days, review the transactions to see if they were again in violation. If so, file a SAR and if they continue in violation and don't register, then it's your decision as to whether or not you want to close the account.
If in the 90 days they have no 'qualifying' transactions, then no continuting SAR is necessary and the matter is closed. That is, until and unless you find that they are again acting as an MSB.
I hear and I forget. I see and I remember. I do and I understand.--Confucius